First EBRD portfolio risk sharing facility to support Moldovan bank

Citește în română

The European Bank for Reconstruction and Development (EBRD) is extending an unfunded portfolio risk-sharing facility to Moldova 's OTP Bank to unlock €30 million of new finance for Moldova's business sector, with a focus on agriculture and trade. 

This is the first such facility signed in Moldova, building on EBRD success in Ukraine, Albania and Bosnia and Herzegovina with similar guarantee instruments.

The guarantee covers up to 50 per cent of OTP Bank's credit risk, enabling up to €30 million of newly generated lending originated by the bank to Moldova's micro, small and medium businesses (MSMEs). MSMEs account for 98 per cent of all business in Moldova and employ 60 per cent of the country's workers.

It includes first loss risk cover provided by the European Union via the European Fund for Sustainable Development Plus (EFSD+), which promotes sustainable investments in EU partner countries.

The facility's risk-sharing structure helps partner banks strengthen their resilience, which in turn unlocks the ability of these financial institutions to channel excess liquidity into new lending using its own funds.

This pilot implementation in Moldova, partnering with a long-standing EBRD client, aims to broaden the spectrum of EBRD products in the market with a solution designed to reduce risk for the EBRD's partner financial institutions and to address financing gaps for MSMEs. The product will be formally launched in Chisinau next week.

"This product offers a new and effective solution that is designed to de-risk PFIs and address MSME financing gaps by unlocking the ability of financial institutions to channel excess liquidity into new lending. It allows financial institutions to extend more credit in priority segments, further improving access to finance for the private sector," said EBRD Head of Office for Moldova, Catarina Bjorlin Hansen, at the signing ceremony in Chisinau.

"In recent years, regional and local risks have reduced the market's ability to provide accessible finance. With EBRD's PRS innovative facility, we will be able to unlock additional liquidities to bridge that gap - to fuel the engine of Moldova's economy. As a sustainability-oriented bank, we are look forward to facilitating ESG standards adoption through the EFSD+ component," said Bogdan Spuza, Executive Committee President and Chief Executive Officer of OTP Bank.

OTP Bank is one of four systemically important banks in Moldova, with an excellent track record in implementing projects ranging from trade finance to energy efficiency as well as MSME credit lines. The EBRD has had a relationship with OTP Bank since 1996.

The EBRD is Moldova's largest institutional investor. To date it has invested nearly €2.5 billion in 177 projects in the country.

Public link

Please use the above public link if you want to share this noodl on another website.